The UK supreme court has cut the compensation awarded to a life-sentence prisoner whose original release was delayed from £10,000 to £6,500, in a ruling that will nonetheless lead to payouts for scores of convicted murderers, rapists and other violent prisoners.

The justices also upheld a £300 payout to a convicted killer for the "anxiety and distress" he endured over six months waiting for his delayed parole board hearing, even though it did not lead to him being released from prison.

The supreme court ruling follows payouts totalling more than £314,500 to 89 offenders, including 38 murderers and seven rapists, who have been awarded sums of between £300 and £10,000 each since 2010 because of delays. They include payments to 10 prisoners so far this year.

The parole board said the supreme court ruling would affect claims for compensation from a further 19 prisoners that have not yet been settled and which date back to September 2008. But a spokesman added that the parole board did not expect the court's decision to trigger a large number of new cases.

The ruling sets out a benchmark for the 19 outstanding claims that substantial compensation will be paid at the rate of about £650 a month if delays in the parole board hearing led to delays in the claimants' actual release.

The justices also make clear that a "modest" award of damages should be made to prisoners who have suffered "frustration and anxiety" after delays of more than three months in their parole hearings even if they did not lead to release.

The justice minister, Jeremy Wright, said he was "very disappointed" that the court had awarded these damages.

"With our new regime of tough, determinate sentences, offenders will spend longer periods in jail, will be subject to tough licence conditions on release, and will not be in a position to pursue claims like this," he said.

The supreme court ruling said the delays stemmed directly from the introduction of the indeterminate sentence of Imprisonment for Public Protection (IPP) in 2005, under which the parole board was given the task of determining release dates. More than 6,000 prisoners are serving IPP sentences, which has led to a big increase in the parole board's workload without an increase in resources. The court said this led to delays in the consideration of the release dates of life-sentenced prisoners as well as IPP inmates.

The first test case was brought by Daniel Faulkner, who was sentenced to life in 2001 for a second violent offence involving grievous bodily harm. The supreme court said his release date was delayed by 10 months due to "administrative errors for which the secretary of state was responsible".

The appeal court awarded him £10,000 compensation but the supreme court reduced that to £6,500, or £650 for every month he was imprisoned beyond what might have been his earlier release date. In the event, Faulkner was twice recalled to prison in respect of allegations of which he was acquitted and he remains in custody.

The second test case involved Samuel Sturnham, who was jailed for manslaughter under an IPP sentence in 2007 after killing a man in a pub brawl. His initial award of £300 by the high court was quashed by the appeal court but has now been reinstated by the supreme court.

The justices said that even when it was not established that an earlier hearing would have resulted in an earlier release, there is a "strong presumption" that the parole board delays caused the prisoner frustration and anxiety and a modest award for damages should be made.

The parole board welcomed the ruling, saying that it set out a clear framework for how such claims should be considered in the future, but said it did not expect it to trigger a wave of new cases.

"The delay in these cases was due to an historic situation where the parole board was suffering with a large backlog of cases waiting to be heard, as the introduction of the IPP sentence increased its workload dramatically, and far exceeded the forecasts. The board has increased its membership and capacity to hear its cases now and is no longer in a position where it is unable to list those cases that are ready to be heard," it said in a statement.

"The parole board currently has 19 claims for compensation from prisoners claiming that the board was responsible for their reviews being unfairly delayed, the oldest dating back to September 2008. This should be taken in the context of the parole board considering approximately 3,700 cases at oral hearing each year."

The statement added that where it had a good case it would vigorously defend such claims, but where it was unable to defend the situation it would seek an out-of-court settlement in line with the supreme court ruling to save legal fees.